Explorer Partners Ltd (the plaintiff), the owner of the cruise ship MV Ocean Diamond, claimed damages arising from a collision with the general cargo ship MV Alessi, owned or chartered by Fenaril SA (the defendant). On 25 May 2014, the MV Alessi, while leaving the port, hit the cruise ship aft while it was docked at the pier. The impact caused structural damage to the cruise ship's tender, broke its lifting hooks, twisted the lashing arms and affected the hydraulic system.

The first instance Court admitted the claim and ordered the defendant to pay compensation. The defendant appealed the decision, alleging that the Court should not order it to pay damages that did not directly and reasonably result from the event, and that any other form of compensation entailing unjust enrichment must be excluded. The plaintiff should have acted diligently to reduce the damage and avoid preventable loss and it should not have been compensated in the amount of a new tender or a new hoisting system, as this would constitute an improvement.

Held: The Court of Civil Appeals (CCA) affirmed the decision.

The CCA held that liability arising from a collision entails the reparation of material damage, including actual damage and loss of profits, as well as personal injuries. If the impacted ship suffers damage, the liability of the offending ship covers the actual and assessed cost of the reparation, including not only material and human labour, but also all other expenses incurred such as salvage and towage, surveys, etc. Regarding the loss of profits, losses of earnings can be claimed for the days when the ship was under repairs, and includes loss of freight, or any other contractual income, in so far as they are duly proven. Uruguay ratified the Convention for the Unification of Certain Rules of Law with Respect to Collisions between Vessels 1910 (the Collision Convention 1910).

The Lisbon Rules 1987 adopted by the Comité Maritime International, although not into force, can be voluntarily applied once an event occurs, and are also relevant. These Rules are a catalogue of uniform guidelines regarding the compensation for damages resulting from ship collisions. Rule C establishes that the right to compensation is limited to 'only such damages as may be reasonable be considered to be the direct and immediate consequence of the collision'. Rule D states that the compensation 'shall place the claimant in the same financial position as he would have occupied had the collision not occurred.' Rule I.1 states that: 'In the event of a vessel being a total loss, the Claimant shall be entitled to damages equal to the cost of purchasing a similar vessel in the market at the date of the collision. Where no similar vessel is available, the Claimant shall be entitled to recover as damages the value of the vessel at the date of the collision calculated by reference to the type, age, condition, nature of operation of the vessel and any other relevant factor.'

The leading principle regarding compensation for torts is the integral reparation of the damage, along with the principle that the compensation must be for those damages that resulted as a direct consequence of the illicit event. The Lisbon Rules also states that things must be restored to their previous state.

The CCA analysed the plaintiff's evidence and declared that the damage and its quantum were duly proven and correctly assessed by the lower Court.